The Future of e-Commerce: Global e-Commerce Trends in 2019 and Beyond

2. The Future of e-Commerce: Challenges for Traders and Customs Agencies

a. Section 321 Shipments

b. CBP Response

3. e-Commerce Trends & Third Party Solutions

Shopping is one of the world’s top online activities, with consumers using mostly desktop computers to place orders followed by mobile devices. According to Statista, global retail e-commerce sales is currently valued at $3.53 trillion and e-retail revenues are expected to reach $6.54 trillion in 2022. In 2017, revenues of the top three e-retailers amounted to $100 billion while total global retail e-commerce sales reached $2.3 trillion. What’s the future of e-commerce? How will global e-commerce trends affect the trade community and ecommerce businesses? Read on for more insights that can help you maintain a successful eCommerce business in 2019 and in the years to come.

e-Commerce Global Trends

Worldwide eCommerce to Hit New High in 2021

Retail eCommerce sales continue its steady upward trend and is expected to reach $4.9 trillion in 2021. $1.3 trillion in 2014 to the projected sales in 2021 show a 265% growth rate. Steady growth means more opportunities. Businesses can capitalize on this trend by using infrastructures that can take their business from offline to online. Businesses that are already online, on the other hand, should continue to find new ways to make their brand stand out online. A number of retailers who are dominating the market are also doing something their competitors are not—focusing on the customer experience in the real world, not just online. It’s all about connecting customers and products via direct-to-consumer models.

Direct to Consumer Models

Digitally native brands that are doing it right focus on brand purpose and equity, variables that describe the value that products bring to the consumer. In short, selling something worth buying and transcending traditional sales and marketing. To increase conversion rates and order value, some tactics digitally native brands employ include influencer marketing, tiered discounts based on spend, installment options for high priced items, and buy now pay later payment methods built into the checkout system. These brands also distinguish themselves by serving small buyer niches and having a mission that aligns with relevant issues such as environmentalism and gender equality.

Focus on Content

Content has always been key to driving conversions, but content that binds people together through shared experience and emotions is the most powerful marketing tool for e-retailers. This doesn’t mean ignoring effective ad strategies, but making sure your target audience identifies on gut level with whatever you are selling. Very few people visit a website for its design, we go there because we need something or we are curious about the product.

But it’s not enough to run a content mill. Great content should be an opportunity to solve a problem and better your buyers’ lives. Take it from successful brands who use multimedia (text, images, videos, etc.) to increase desire, awareness and interest online and off.

Evolution of Social Media Marketing

More and more people are doing their shopping on social media platforms. With the improvement of social media’s selling capabilities, social media platforms are more than just advertising channels. People can now conveniently and quickly purchase products on their chosen social media platform.

Global e-Commerce

McKinsey reported that 1.4 billion people will join the global middle class by 2020 and 85 percent will be in Asia Pacific (APAC). As e-commerce shifts to the East, retailers will be forced to adopt local strategies and work with local partners who understand the market.

The Future of e-Commerce: Challenges for Traders and Customs Agencies

The rapid rise of e-commerce trade in North America was partly driven by the 2016 increase in de minimis value of Section 321 shipments that allowed more products to enter the U.S. free of duty and taxes. U.S. Customs and Border Protection (CBP) is aware of the economic benefits of e-commerce as well as potential security risks, and they continue to develop solutions for government agencies and the trade community.

Section 321 Shipments

Most e-commerce shipments are Section 321 or low-value parcel shipments. Section 321 is an informal entry or release option for shipments valued at $800 or less. It is designed to speed up the processing and release of low-value imports, which generally do not require a customs bond. Section 321 is used for both personal and commercial shipments, allowing importers and e-commerce retailers to save time and money.

To be eligible for release as Section 321, the shipment must not be valued at over $800 and must not be one of multiple lots under a single order or contract. Only one shipment imported into the U.S. by one person per day is eligible.

Section 321 shipments usually go through Customs without a hitch, but there are times when CBP may refuse entry or hold the shipment. This happens when the shipment is considered “high risk” for a particular merchandise class or type.

Shipments not eligible for Section 321 release are those:

Regulated by government agencies like the Food and Drug Administration (FDA), Food Safety Inspection Service (FSIS), National Highway Transport and Safety Administration (NHTSA), Consumer Product Safety Commission (CPSA), and United States Department of Agriculture (USDA)

Requiring inspection before release

Subject to Anti-Dumping/Countervailing duty (ADD/CVD)

Subject to quotas

CBP Response

Since Section 321 shipments are informal entries, CBP is not collecting data on imports that would normally be used for enforcement purposes. In addition, e-commerce retailers work with third parties to act as the seller and carriers may not have complete information about the seller, manufacturer and final recipient of the merchandise.

To address data gaps, CBP has released a plan that includes education, engagement and enforcement recommendations to address Section 321 challenges. Some are short-term like submitting data through the Automated Commercial Environment (ACE) for all filers, while others are long-term solutions such as relying on existing laws to give CBP flexibility to identify parties responsible for the accuracy of reports.

The enforcement plan includes a change to reporting requirements for Section 321 shipments that essentially increase the amount of information to be provided by carriers and importers. The voluntary pilot phase has already started (August 22, 2019) and will run for about a year.

Third Party Solutions to Address Global e-Commerce Trends

More data requirements for Section 321 shipments usually mean system and process updates for filers. This can be an expensive undertaking particularly for small businesses and importers who file their own reports. The trading community has always looked to third party providers to ensure compliance and make cross-border trade as smooth as possible.

Global eTrade Services (GeTS) is a CBP-approved provider that helps carriers, importers and authorized agents meet the new Section 321 requirements cost-effectively. GeTS cloud-based solutions can be subscribed on the fly and used standalone or in conjunction with existing applications.

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